As the possibility has been raised that Samsung Electronics and SK hynix will build a semiconductor cluster in the Honam region, department stores in Gwangju are also growing more optimistic. If the bid materializes, a large inflow of high-income professionals could expand demand for luxury goods, premium fashion and food and beverage.
In Gwangju, Shinsegae is pushing the "The Great Gwangju" project to redevelop the Gwangju intercity bus terminal and the U·Square area. Hyundai Department Store is also building "The Hyundai Gwangju" on the former Jeonnam Spinning and Ilshin Spinning site.
On the 25th, according to the government and related industries, Samsung Electronics and SK hynix are discussing plans with the government to create a regional semiconductor cluster. Separate from the Yongin semiconductor cluster now under construction, Honam is reportedly being strongly considered as the location.
Kim Yong-beom, the presidential chief of staff for policy, said at the Kwanhun Forum the previous day regarding the possibility of regional semiconductor investments by Samsung Electronics and SK hynix, "It is true there are discussions among corporations, ministries and the government on how to determine the location," adding, "The talks are almost in the final wrap-up stage." He also stressed, "This is not about relocating facilities in the Seoul metropolitan area such as Yongin, but about creating an entirely new belt."
Shinsegae Department Store and Hyundai Department Store, which are making large-scale investments in Gwangju, are closely watching the developments. If a semiconductor cluster is established, the mid- to long-term increase in high-income professionals and family-based demand could secure a stable customer base.
A department store official said, "What matters for a department store location is how solidly residential complexes and industrial parks support it," adding, "If a semiconductor plant and partner-company employees move in, it can be a positive factor in that it could grow not just transient foot traffic but a resident customer base with purchasing power."
Department stores in the southern Gyeonggi region, where Samsung Electronics and SK hynix have business sites, have recently shown strong sales growth. Shinsegae Department Store South City Jukjeon saw sales last month rise 16.2% from a year earlier, while luxury jewelry and watch sales jumped 120% and 60%, respectively.
Hyundai Department Store Pangyo also posted a 44.7% sales increase over the same period. Luxury jewelry and watches and premium apparel rose 56.0% and 31.5%, respectively. Lotte Department Store Dongtan's sales climbed 30%, outpacing the average growth rate across all stores.
Gwangju has a strong character as a wide-area commercial zone that absorbs Honam consumption, but it has been assessed as having weaker department store competitiveness compared with other metropolitan cities. Gwangju Shinsegae, the region's No. 1 department store, posted about 820 billion won in sales last year, ranking 15th among department stores nationwide. Lotte Department Store also operates a Gwangju branch, but due to factors such as store aging, its national sales ranking has remained in the low 40s in recent years.
Shinsegae and Hyundai Department Store plan to invest amounts in the trillion-won range in Gwangju to capture local shopping demand. The "The Great Gwangju" project that Shinsegae is pursuing is a 3 trillion won complex development of the Gwangju intercity bus terminal and the U·Square area where Gwangju Shinsegae is located.
Shinsegae plans to build a new department store building by 2028 and, by 2033, to sequentially develop a complex including the terminal, hotel, performance hall, offices, and residential, medical and educational facilities. When the new department store building is completed, the sales area will expand to about three times its current size.
Hyundai Department Store is also seeking to reenter Gwangju through "The Hyundai Gwangju" project, investing more than 1 trillion won. Hyundai Department Store entered Gwangju in 1998 by managing the former Songwon Department Store building under contract, but as profitability worsened amid a slump in nearby commercial districts, it exited Gwangju in Jul. 2013 when the management contract expired.
The Hyundai Gwangju will be built on the former Jeonnam Spinning and Ilshin Spinning site in Im-dong, Buk-gu, Gwangju, with a total floor area of 272,955 square meters and six basement levels to eight above ground. It will be about 1.4 times larger than "The Hyundai Seoul" in Yeouido, Seoul, and construction is underway with a target opening in 2029.
An official in the retail industry said, "In Gwangju, many consumers with purchasing power who look for luxury or premium brands have often traveled to Daejeon, Busan or the Seoul metropolitan area to shop. The reason department stores are making large-scale investments is a strategy to draw such out-of-region spending back into the area." The official added, "If a semiconductor cluster is later created, the addition of high-income professionals, partner-company employees and family resident demand could expand the growth potential of Gwangju's department store market."